Offshoring's Achilles' Heel

“AmEx used to be a waterfall development shop — which enabled them to offshore a lot of the development work but meant 10-16 months delivery time — but have moved to small, agile teams with continuous delivery”

There is an overall trend toward increasing offshoring – but there is also a rollback happening with a lot of organizations pulling some of that offshoring back – the pendulum for many has swung too far, or the risks and costs of offshoring were, quite simply, under estimated. Amex is apparently bringing this development work back onshore.

Sandy continues, emphasis added:

Interesting when I think back to this morning’s keynote, where Gerald Chertavian of Year Up said that they were contacted by AmEx about providing trained Java/Pega developers to help them with re-onshoring their development teams; the AmEx presenter said that he had four of the Year Up people on his team and they were great. This is a pretty negative commentary on the effectiveness of outsourced, offshore development teams for agile and continuous delivery, which is considered essential for today’s market.

It’s incredibly damning testimony for the effectiveness of outsourced offshore development teams for agile and/or continuous delivery – which almost all BPM implementation work is! This is true whether you are a Pega customer, an IBM BPM customer, a Camunda customer, an Activiti customer, a Bonitasoft customer, or an Appian customer. It literally doesn’t matter what software you pick – you need to have your technical team intimate with your business team.

AmEx is now hiring technical people for onshore development that is co-located with their business process experts, greatly reducing delivery times and improving quality.

This is how BP3 has been delivering Business Process Management solutions since 2007. This is how everyone should be doing it. Whether those technical experts are your own or your consultants, you want them co-located with your business experts and business process experts. Delivery time and quality and productivity greatly outweigh the benefits of a lower hourly rate.

Offshoring’s Achilles’ heel is that it is too far away from the action. It fails to deliver in a timely fashion, and it fails to deliver with the same quality (where quality is a concept that includes correctly understanding the requirements). The secret no one wants you to know is that offshoring your technical delivery in BPM is actually more expensive than doing it onshore.

Despite these shortcomings, we see our customers and other companies constantly trying once again to push that offshoring rock up the hill, only to watch it fall down again. The pressures to view employees as a cost center rather than an asset, and to focus on hourly cost rather than ROI, make this all the more difficult to overcome. The most successful BPM programs have resisted this urge, however.

Customers interested in digital BPM would be better served working with companies that analyst firms like Forrester and Gartner have identified as being leaders in digital BPM and customer experience. At BP3, expand internationally because that’s where our customers are – not because the staffing costs are lower.